Correlation Between Ab Small and Glg Intl
Can any of the company-specific risk be diversified away by investing in both Ab Small and Glg Intl at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ab Small and Glg Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Glg Intl Small, you can compare the effects of market volatilities on Ab Small and Glg Intl and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ab Small with a short position of Glg Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Glg Intl.
Diversification Opportunities for Ab Small and Glg Intl
Very poor diversification
The 3 months correlation between QUAIX and Glg is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Glg Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glg Intl Small and Ab Small is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ab Small Cap are associated (or correlated) with Glg Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glg Intl Small has no effect on the direction of Ab Small i.e., Ab Small and Glg Intl go up and down completely randomly.
Pair Corralation between Ab Small and Glg Intl
Assuming the 90 days horizon Ab Small Cap is expected to under-perform the Glg Intl. In addition to that, Ab Small is 1.45 times more volatile than Glg Intl Small. It trades about -0.07 of its total potential returns per unit of risk. Glg Intl Small is currently generating about 0.2 per unit of volatility. If you would invest 8,458 in Glg Intl Small on September 12, 2024 and sell it today you would earn a total of 319.00 from holding Glg Intl Small or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Small Cap vs. Glg Intl Small
Performance |
| Timeline |
| Ab Small Cap |
| Glg Intl Small |
Ab Small and Glg Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Glg Intl
The main advantage of trading using opposite Ab Small and Glg Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Glg Intl can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Glg Intl will offset losses from the drop in Glg Intl's long position.| Ab Small vs. Prudential Jennison International | Ab Small vs. Fidelity New Markets | Ab Small vs. Ohio Variable College |
| Glg Intl vs. Western Asset High | Glg Intl vs. Ppm High Yield | Glg Intl vs. Artisan High Income | Glg Intl vs. Metropolitan West High |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |